What is a not for profit organization?

         Not for profit organizations (NPO) are organizations that the law allows to use excess income to be able to carry out the objectives of the organization. In most cases, NPO are similar to profit organizations, the only difference is that they do not exist to make profit and dividends. This does not mean that the organization cannot make profits of their own. In fact, the general rule is that the profits generated by such companies can only be used for the self preservation of the organization as well as the expansion or plans that the organization plans to engage (Mcmillan, 2008, p.23). In a nutshell NPOs can be described as organizations without owners that are allowed to make profit which in turn realize the operation of the organization. Thus, NPOs generally are not used to benefit individuals but rather organizations and their purposes and management. Similar to profit organizations, most NPOs have board members or rather controlling members. These organizations pay their employees but also have some employees or persons who work for the organization on voluntary terms (without payment). The functions of most NPOs vary depending on the activity that the organization aims to participate in for example, economic activities, representation, management to mention but a few. The aim of all NPOs as earlier mentioned is not to gain success that comes in terms of wealth but rather to earn the satisfaction of giving some sort of value to the people they are administering to.

In most cases, and in most countries, NPOs are incorporated under statute which means that they are legal entities just like individuals are. They may be either membership or board only, regardless of their state, most countries recognize the commendable jobs that these organizations do for society and reward them by giving them tax exemptions.

Why was your chosen organization set up and what are its main aims and objectives?

The company has chosen to create a community group whose key function will be to help in the development of small businesses in the region. More often that not, small businesses in a society always end up suffering in situations where bigger corporations establish base in a particular organization. A case scenario in this case would be where a larger food provider such as Starbacks coffee or McDonalds sets up a chain in a smaller community. This would translate to most it not all of the smaller fast food shops closing up because they cannot afford to compete with such major completion. The aim of our community group is not only to create a united front for all the smaller businesses but also to create a forum where the business owners can meet, share ideas as well as receive training (Brown & Ruhl, 2003, p. 18).

The objectives of the community group are to strengthen the smaller enterprises in the community by teaching them good business skills. They also include the uplifting as well as financing of these small businesses where possible in order to increase profit for these business and to help better the lives of the owners. Finally, the objective of the organization is to help the members create a united front as far representation of these small businesses is concerned in that particular society. As well as the creation of a forum where these enterprises can share on their personal experiences as well as challenges as far as the operation of a small business is concerned in that particular community.

How is the organization structured and managed?

The organization will comprise of different members as well as groups that will form part of the members. These individual members will comprise of individual owners of small businesses in the community. It will also consist of representatives from the TSD Analysis ltd, local banks associations as well as the town’s representative’s office who will individually form members of the community group. These members will then elect a board of directors who will represent at least all stakeholders in the group. The board will be directly in charge of running the operations of the organization including the making of crucial decisions concerning the organization and will be assisted by a team of paid trained people who will be in charge of handling the activities of the organization (Glaeser, 2003, p. 71). Other than the election of board members, it is the duty of the members to convene regular meetings as well as amend the organizations by laws.

Among the team of employers that the organization will employ will include a team of competent lawyers who will represent the organization and its interests as well as a team of accountants and business trainers as well as other employees needed for the management of the organization. While on one hand some of these employees will be paid for their services, others will be there on a voluntary capacity.

It is important that the organization comply with all rules and legislation that deal with NPOs or risk losing angering the government.

Identify how the core ‘functional areas of business’ are carried out within this organization.

In most cases NPOs are similar to profitable companies as far as the functionality of the business is concerned. The board of directors that are appointed by the members carries out the administrative function in the organization. These people are in charge of the day to day running and management of the organization. These people are able to answer questions concerning the organization and how it is being run.

The other functional area is the finance function. This organization will be able to deal with the financial needs of the small business owner. Therefore in one way or the other there will have to be a financial department to be able to manage the organizations stream of income (Walraven, 1995, p. 19).

The human resource function is also very important for the organization. This is because it is charged with the duty of ensuring that the employees of the organizations are well managed. Most NPOs have to rely on one form of employee or the other. These employees are either paid or in some cases work voluntarily for the organization. Either way, a system has to be in place that would ensure that the employees are well managed by the organization.

In our case, we could conclude by adding the research and development function. This is because other that the fact that the core company revolves around research. The organization relies on research as a tool to be able to further develop the small business owner’s agenda.

Finally, the production function is important for the organization for its main agenda is to provide a service that would please all stakeholders in the long run.

Comment on how this organization’s external context differs from that of the supermarket you studied for Assessment 2.

This particular organization is different as far as its external context is concerned from that of the supermarket because of the core function of both organizations. On one hand, the supermarket is influenced by profit generation, the organization is not working so hard to rake in profit but rather to benefit the people that it was created to help in the first place. This would mean that an item such as marketing in order to draw in customers is replaced by sensitization as awareness campaigns which are done for social benefit (Migliore, 1995, p. 62).

There is also the fact that for the organization, competition is not an issue unlike the supermarket. The supermarket has a competitive business environment in which it has to function in to be able to make profit. On the other hand, there is no need to compete as far as the community group is concerned. The external social environment is favorable to the community group as far as its reception into the community is concerned because the community is able to recognize with the efforts being made by the organization in terms of social responsibility whilst the outlook my totally be different when society looks at the supermarket. Society in generally lenient as far as NPOs are concerned because while other profit making organizations have to follow strict guidelines, the law is often lenient to the NPOs. Therefore, the running and maintenance of an NPO is less of a stress that the management and maintenance of a profit making organization.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

Glaeser, E. L. (2003). The governance of not-for-profit organizations. Chicago, University of Chicago Press. http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=212632.

Mcmillan, E. J. (2008). Model policies and procedures for not-for-profit organizations. Hoboken, N.J., Wiley. http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=219774.

Walraven, G. (1995). Business thinking in not-for-profit organizations. Gaithersburg, Md, Aspen Publications.

Migliore, R. H. (1995). Strategic planning for not-for-profit organizations. New York, Haworth Press.

Brown, H. H., & Ruhl, D. L. (2003). Breakthrough management for not-for-profit organizations: beyond survival in the 21st century. Westport, Conn. [u.a.], Praeger.